Dharwad LCV plant on Tata Motors’ roadmap

Dharwad LCV plant on Tata Motors’ roadmap

Economic Times BANGALORE - Gabriel Vaz

BANGALORE:

LEADING automobile manufacturer, Tata Motors, is planning to set up a Rs 1,500-crore plant for bus and light commercial vehicle manufacturing plant at its existing unit in Dharwad.

The company has already submitted a proposal envisaging an investment of nearly Rs 450 crore for bus building and chassis preparation. Another project for manufacture and assembly of LCVs at an additional investment of over Rs 600 crore has also been mooted, according to Karnataka’s large and medium industries minister Mr Katta Subramanya Naidu.

The total investment envisaged by Tata Motors at its Dharwad plant, Mr Naidu told ET, would be in the region of Rs 1,500 crore with roughly Rs 200 to 300 crore coming from the company’s vendors.

About 30,000 buses and LCVs are expected to roll out from the new units, which are also likely to provide direct employment to 20,000 people with ancillary units coming up in the vicinity contributing another 10,000 indirect employment opportunities, Mr Naidu said.

Though the Tata Group’s Telco Construction Equipment (Telcon), which has been operating in the twin cities of Hubli-Dharwad for almost 10 years now, had about 600 acres of land, it had sought an additional 300 acres of land for the new projects. The additional land is also proposed to be utilised for setting up vendor parks.
Both the industries and finance department had given in-principle clearance to Tata Motors to go ahead with the project, the minister said pointing out that the company had sought specific concessions in land acquisition and conversion of the VAT amount repayable over a 30-year period at 0.1% interest per annum and the supply of water at concessional rates in view of the location of the project in the backward region.

Another major concession demanded by the Tata Motors was sanction of additional soft loan amount of about Rs 100 crore repayable over a 30-year period towards the enlarged scope of the project to bring the fiscal incentives at par with other states.

However, Karnataka’s deputy chief minister and finance minister B S Yediyurappa, who had met the company’s top executives along with Mr Naidu, is understood to have agreed to extend the benefit of stamp duty exemption for land acquisition besides providing the land at concessional rates in view of the large employment potential and development of the Hubli-Dharwad region. He has also agreed to extend entry tax and special entry tax for new investments waiver for the first five years as the same has been incorporated in the new industrial policy for the period 2006-11.

The industries minister has made out a strong case for allowing states like Karnataka with large pockets of backward and arid zones in Hyderabad-Karnataka and Mumbai-Karnataka regions to extend the benefits of waiver of income tax and excise duty for a period of five years to attract investment as is being done in the case of states like Uttaranchal and Himachal Pradesh.

In addition to the new industrial policy, Karnataka will be launching a major initiative for skill development and job training for unemployed youth as part of the ambitious programme of creating a lakh jobs annually in the IT/ITeS and BT sectors, apparel, hospitality, security, building and construction sectors. MoUs will be signed on November 23 with trade and industry organisations like CII, FICCI, BCIC and KASSIA for providing training, the minister said.